As VAT accountants we offer tailored solutions that meet your business needs, whether public or private. We can help save time while meeting tax requirements efficiently while ensuring you don’t pay any unnecessary taxes.
VAT is the tax you must pay when purchasing goods or services. However, if your company has a turnover of more than £85,000, you will be required to register for and collect VAT on products. In that case, retailers can buy from VAT registered companies and charge customers a reasonable amount. However, there are specific rules to follow once registered each quarter; otherwise, penalties could be applied. The VAT that is charged is shown below:
VAT on Products, Goods and Services
|VAT on Goods and Services||20%|
|VAT on products, like health and heating items||5%|
|VAT on certain services such as building, publishing, health, and kids clothing||0%|
|VAT on some products are exempt, like postage stamps, betting and educational activities||Exempt|
Use our Free Online VAT Calculator for your VAT Calculations
VAT penalties by HMRC
|Penalty of taxes understated or claimed if you file a tax return with a mistake or deliberate error.||100%|
|Penalty of an assessment when HMRC gives you a figure that's too low, and you don't inform them of the error in the timeframe of 30 days.||30%|
|Penalty when you file a paper VAT return unless HMRC has advised you that you're exempt from filing your return with the VAT Online account or using Making Tax Digital software.||£400|
If you do not submit your VAT return or pay your VAT on time, then the following consequences are enforced:
How much you pay on penalties
|Defaults within 12 months||Surcharge if annual turnover is less than £150,000||Surcharge if annual turnover is £150,000 or more|
|First time||No surcharge||No surcharge|
|Second time||No surcharge||2% (no surcharge if this is less than £400)|
|Third time||2% (no surcharge if this is less than £400)||5% (no surcharge if this is less than £400)|
|Fourth time||5% (no surcharge if this is less than £400)||10% or £30 (whichever is more)|
|Fifth time||10% or £30 (whichever is more)||15% or £30 (whichever is more)|
|Sixth time or more||15% or £30 (whichever is more)||15% or £30 (whichever is more)|
Making Tax Digital(MTD) is mandatory for UK businesses, accountants, and bookkeepers. HMRC or Companies House force businesses or companies to keep records digitally to submit their taxes in MTD format instead of paper files or through former methods like EDI (Electronic Data Interchange). This change has been made as part of Making Tax Digital legislation in January 2017; all VAT registered companies must comply with it by 2020 at the latest when reporting deadlines approach.
VAT accountants will keep you up to date on the latest HMRC or Companies House initiatives. Naseems can help make sure changes in taxation never catch your business off guard, and we have a team of chartered certified accountants standing by to provide VAT advice whenever it matters the most. We know that every company operates differently, so they need specific VAT assistance when filing their tax returns; our experts can assist you from the start until completion, ensuring complete compliance with current regulations.
The right VAT accountant can make your company’s tax more efficient. So, you must hire someone who understands and knows the rules and regulations around VAT. Our professionals will be able to assess your business structure or suggest which business structure is best for you and advise accordingly.
When you start your business, one of the most critical tasks is to obtain VAT registration. This does not have to happen until revenue reaches £85,000, but you will be liable to pay VAT if you surpass this threshold.
We’ll get your paperwork submitted before the deadline with no hassle. We can take care of your VAT returns for you, so you don’t have to worry about anything. By letting us take care of your VAT return, you can prioritise looking after your business and growing it as much as possible.
Our expert will be with you every step of the way, from advising on what tax schemes are best for your business to making sure that all transactions go smoothly. Our VAT accountants are here to help you grow your business and ensure success is never too far away. We know there’s no easy answer when deciding how much time should be spent working out your tax and filling out your returns. At Naseems Accountants, we make sure that each client gets valuable advice based on facts in order for you to get as much revenue as possible while still adhering to VAT rules.
These are the most common schemes, but each has benefits and drawbacks that depend on your needs as an entrepreneur or business owner. To choose a scheme, you must evaluate your business structure, so you do not end up paying more in taxes.
Flat rate: Flat rate schemes are a great way to provide small businesses with low revenue. Flat-rate pricing means the company has one fee with no hidden costs or surprises. The scheme is helpful as you pay a percentage of income to HMRC, but you will still charge sales at the same rate as normal. For example, goods and services are mainly 20%, while kids’ clothing is zero-rated.
With the flat rate VAT scheme, you can spend less time accounting for taxes with your business. Instead of calculating on every transaction, you pay a percentage that will be lower than standard rates because it considers both expenses and sales. Many traders find it advantageous to have flat-rate percentages for their trading sectors.
How much you pay on penalties
|Category of Business||Current VAT Flat rate (%)|
|Accountancy or bookkeeping||14.5|
|Catering Services Including restaurants & takeaways||12.5|
|Entertainment or Journalism||12.5|
|Hotel or accommodation||10.5|
Standard VAT: Standard VAT accounting allows you to reclaim the tax that may have been charged on your purchases. You will pay or receive back any money owed; this will be the net of input tax and output tax.
The VAT of your products will be calculated from the date you first raise an invoice before a customer pays. It can be difficult to budget if you don’t know how much your business will owe in tax. If the amount of VAT owed is different from what was paid, then there may not be enough cash left over for other things like paying suppliers or employees at month-end.
Cash VAT: If you’re a small business owner and your customers are slow to pay, cash accounting can benefit. The benefits of this system also come with some drawbacks as well. Suppose bad debts arise from sales. You will not have to pay the tax on this until you receive the money; therefore, there is no tax to pay on money that you don’t receive. The drawback is that you do not get any input tax back until you’ve paid your suppliers.
If you’re interested in how the VAT system works, speak with one of our VAT accountants. Our in-depth knowledge and expertise ensure that we can provide you with anything from accounting to tax services. In addition, we follow a 100% satisfaction guarantee, so if it’s not meeting your needs or expectations at any point during the process, let us know.
Our process is fairly straightforward. We utilize approaches that are ideally tailored to your business sector’s performance requirements.
Do you have questions about VAT returns? Are you interested in registering for VAT returns? We are happy to assist you in any way that we can.
One of our VAT accountants will talk to you about your needs. We are happy to help you to grow your business.
Next, you need to say “YES.” We can provide a fixed quote for the services you necessitate.